When you take out a loan on a new car, boat, motorcycle, or other type of possession, it essentially becomes collateral or security for the loan. The bank or lender specifies when you are to repay the loan principal.
That includes any finance charges. When you fail to pay as required, you open the door to a repossession.
Repossessions are when the lender seizes property and takes ownership of it. You are no longer the owner of the property. However, you remain the owner of the loan you used to pay for the item.
There are two general types of repossessions: voluntary and involuntary. Under a voluntary repossession, you return the item to an agreed place or call your lender to pick up the item from your residence. Under involuntary repossession, the lender pursues you. They pick up the item anytime they legally can.
Most people think they are free from repossession if they have paid for their car. But beware. A repossession can occur if:
- You take out a title loan for your vehicle and refuse to pay it
- You use your vehicle as collateral for a finance company or personal loan
- The IRS seizes your assets due to an unpaid balance
- There is a judgment against you in civil court to seize your assets
Stressed about not being able to get a new car because of your repossession? We’ve removed hundreds of them. Contact us TODAY!